China Feihe Ltd Ordinary Shares

06186: XHKG (HKG)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
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Feihe Earnings: Results Dragged by Lower-Than-Expected Margins; Fair Value Estimate Intact

Jacky Tsang

Apr 1, 2025

Narrow-moat China Feihe’s 2024 earnings fell 15% short of our expectations, largely due to a lower-than-anticipated operating margin, driven by increased marketing expenses aimed at addressing heightened industry competition. We reduced our 2025-26 earnings estimates by 7%-12% accordingly. However, we retain our fair value estimate of HKD 6.10 per share as we left our longer-term forecasts unchanged. Our valuation implies 13 times 2025 price/earnings, 7 times enterprise value/EBITDA, and a 5.6% dividend yield. We see the shares as fairly valued and our preferred pick in the China dairy sector is Yili.

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China Feihe Ltd Ordinary Shares

Feihe Earnings: Results Dragged by Lower-Than-Expected Margins; Fair Value Estimate Intact

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